Angela and I have turned away five potential bookings for upcoming open nights in just the past 30 days!  Prom season is upon us and there is a growing trend among frothy high school seniors to convince their parents that a post-prom party at a “rented home” is a great idea.

We’d rather be vacant.

We’ve been blessed with more than 500 bookings, this blog is about the dozen or so we would rather have said “Thanks But No Thanks” to.  For us, local social gatherings are one of several types of bookings which we have learned can easily lead to lost revenue due to:

• Unnecessary damage to our home
• Interruptions for the subsequent guests
• Disputes with the offending group
• Upset neighbors
• Negative reviews

To protect ourselves against money flying out the (broken) window we have established a profile, for our business, of groups that we usually would rather not do business with. 

• Bachelor/bachelorette parties, post wedding parties (police helicopter!)
• Young adults without proper supervision
• Bookings with pets (READ VR Dilemma: Pet Friendly or Pet Free?)
• Groups staying less than 3 nights
• Groups not inclusive of the person who has signed our rental agreement

Ultimately the list above equates to LOST revenue.  Broken windows, broken glass in the pool, stolen items, damaged furniture, scratched floors and police helicopters…oh my!  With only four hours between bookings, we don’t have the time to scramble while trying to resolve an unforeseen issue; vacation home owners get enough of those anyway.

There are three primary methods we use for screening our potential guests:

1. Ask Them.  Seems obvious enough, right?  I’m amazed at how many owners I talk with who say they employ little to no screening for their inquiries.  We try to speak live with each person who books with us so we can ask them about their trip.  In addition to finding out why they are renting we often can provide great insight into how they can make the most of their stay.  Recall Delightful Memories?


2. Google Them.  I spoke with an owner at this years’ HomeAway Summit who runs a criminal background on every guest.  While that may be extreme, the idea of doing a little diligence on the person/group booking your home is a good one.  Google makes it easy, and sometimes you uncover that your guests may have something very interesting in common with you.


3. Get a Reference.  When considering large groups, like a traveling youth sports team, we will politely ask whether or not they have stayed in    vacation homes before and if they would be able to provide a reference.  If they hesitate, that is a red flag to us.

CASE STUDY -The Hawaiian High School Basketball Team:  Three years ago we received a call from a high school basketball coach looking to rent our home for his group of teenage boys.  Stopping just short of “Thanks but no thanks” we asked for a reference, to which he provided three.  After speaking with two of them, we said we’d only be comfortable with a larger security deposit.  He obliged.

We set clear expectations of how our home should be treated while asking if there was anything special they would need for their group.  He asked for a large rice cooker.  We obliged.

THE RESULT:  Their stay was fantastic, no trouble whatsoever.  He has rented from us three more times for a total of six weeks and they are model guests.  We no longer require any cash deposit (just the cc# in our agreement) and it’s a giant “Love fest” between us with gifts and thanks flowing freely both ways.

So there can be exceptions, but you need a baseline by which to make those exceptions.  The beauty of creating a profile of groups you don’t want is that it gives you a means by which you can also make exceptions. 

The Bottom Line:  Not every booking is good for our business.  And what’s good for our business may not be good for yours, each home is unique.  Develop criteria to identify which bookings are not right for your business and say “Thanks But No Thanks!” to those inquiries unless you can somehow reduce your exposure to the risk those bookings present.

Resisting the temptation to book a reservation that doesn’t fit your guest profile will result in a lower average cost for turns, fewer headaches and a higher quality experience for the guests you do want. 

Here’s to great guests, risky guests and the discernment to recognize the difference.

Cheers!

Michael

The Little Things Can Make a BIG Difference!

“The drain in the bathtub was clogged.  And the toilet made noise all night.  And three light bulbs were out.  And we could have used some Scotch tape.  But other than that, it was a great NY apartment.”

That is my feedback about the trip Angela and I recently took to New York where we stayed in an apartment we found on VRBO.  As a vacation home owner, maybe I’m more critical.  But nonetheless, that’s my honest response about the $625/night (peak) apartment we stayed in.  We didn’t pay near that, but will we stay there again?  Maybe.  Or maybe we’ll explore other options first.

How many “maybes” are your guests telling everyone but you because of neglected little things that require more thoughtfulness to fix than time or money?  What is your system for making sure the little things don’t give your guests the wrong memories (as in, not DELIGHTFUL).

Below are some easy ways to manage the little things:

1. Stay a While – We make it a point to stay in each of our homes at least once a year for at least three days, more often when we can manage. There are little things that our guests simply won’t take the time to point out. A good way to identify that the guest bathroom has a slow drip or the master bedroom door is difficult to shut is to experience those things yourself.  

*Best Practice – Invite friends to stay with you and ask them to be on the lookout for anything that might need attention.  This is a great way to spend quality time with Loved ones, enjoy your vacation home, and get a fresh set of eyes and expectations that will make your home better.

1. Check It Off the List – We have checklists for our PM’s that break out the little things.
   Some items on our lists include:

*Best Practice – For a FREE copy of our PM checklist, email Michael@USCVH.com.

1. Help Them Help You – Make it as easy for your guests to communicate little things that need attention. We call them “Uh Ohs” and “Oh Wells.” If they say “Uh Oh…” about something during their stay we ask them to let us know about it right away so we can try to fix it for them during their stay.  If they say “Oh Well” then we ask them to let us know at check-out so we can fix it for their next stay. 

*Best Practice – Three easy ways to gather feedback:

• At check-in encourage them to reach out for any little thing - email and text messaging work great for this.
• Hang a little dry erase board on the fridge with a note asking for the “Oh Wells.”
• In your follow-up Thank You email/card ask them if there was anything that could have been improved upon for their next stay in your home (See my blog post on Soliciting Referrals).

The Bottom Line:  Minding the little things is a great way to maximize revenue through repeat business and referrals, and most little things are inexpensive and easy to manage. 

We all spend a great deal of time providing outstanding accommodations to our guests so they will rave about us to anyone who will listen.  If we don’t manage the little things that can detract from their stay we undermine our efforts and hurt our future business. Standing in shin high water during showers or having to go out and buy a new light bulbs can be the difference between “It was AWESOME!” and “It was alright but…”   

So here’s to doing the little things that make a big difference!

Cheers!

Michael

How many of your bookings in 2011 have been from referrals?  Or more to the point, how much of your revenue in 2011 is from referrals? 

Are you content with your answer to these questions?  Wouldn’t it be nice to have one or two more referrals each year?  In this blog we’re going to look at five ideas that, when used together effectively, will help to drive incremental bookings through referrals. 

1. Be Worthy of a Remark – The best form of advertising for any business is a customer testimonial via word of mouth.  Give your guests a reason to tell anyone who will listen about their time in your home. Whether it’s your attention to detail, your amazing collection of board games or your 120” home theater screen, give them something to be excited to tell others about.
2. Get “Real” Business Cards – Invest a little money and have some professional business cards on heavy stock printed up (rather than the cheap looking “print at home” variety). Business cards are often the first impression someone gets when hearing of your business.  Include your HomeAway.com and VRBO.com listing numbers along with a one-liner or a few key words that articulate the reason why someone should consider calling you for their next vacation.   
3. Implement a Guest Referral Program – Give your guests and others who know about your business a reason to refer people to stay with you.  Money is always a great motivator, it’s what we’ve used for several years now.  We pay $15/night to any person who refers a booking to us, that’s over a hundred bucks for a week long booking.  Cash is a good reminder and incentive for someone to mention your business.
4. Ask for Referrals – Without being pushy, ask your guests and those acquainted with your business to refer anyone who they think may be interested in staying with you.  With our business we do this a couple different ways.  First, in each of our homes we have placed an 8.5 x 11” acrylic stand with a full color flyer in it that talks up our referral program and encourages our guests to take several cards to hand out when they are back home. The acrylic stand has a built-in business card holder and our property managers make sure they are always full. Second, in both the checkout email and in the handwritten “Thank You” cards (remark worthy) our guests receive we remind them that we have a referral program and point out that if they enjoyed their time in our home the best compliment they can give us is to refer us to a Loved one.
5. Stick with the Plan - Given the nature of our business, long sales cycles and relatively few annual transactions, referrals can be few and far between.  But, that makes each referral even more valuable to business such as ours.  Angela and I diligently performed the actions above for nearly a year before we actually booked our first referral.  Yes, we frequently discussed whether it was worth the extra effort, but that first referral payment we made for $105 on a 7-night booking that was clearly incremental (and off-peak!) made it all worth it.  You are planting seeds that may or may not bear fruit down the road, but at least you are giving them a chance to bear fruit if you keep planting.  

The Bottom Line:  Referrals are one of those areas of business that can seem easier said than done.  But each referral is an incremental booking, which can be the difference between a good month and a great month.  Word of mouth is the most powerful form of advertising for any business.  Giving your guests a reason to tell others about their experience in your home, and making it easy for them to do so, is an effective and inexpensive way to maximize your revenue. If you will give them an experience that is worthy of a remark, and if you make it easy for them to refer you to others, your bottom line will reflect your efforts.

Here’s to bigger bottom lines…

Cheers!

Michael

There are many ways to measure the success of a vacation home rental business.  How do you measure yours?  Are you hitting the goals you’ve set for yourself?  Or more importantly, do you even have goals for your vacation rental business beyond “to cover our mortgage” or “make a profit?”

In this blog we’re going to look at a few different ways to set goals for your vacation rental business in order to track your success.  Some of them can be tied directly to your profits and losses, while others may not directly impact your bottom line, but are good indicators for success, nonetheless. 

To start off, it’s a good idea for any business owner to establish goals.  As a general practice, I like to use the old business adage that every goal should be S.M.A.R.T.  (For more information on S.M.A.R.T. goals visit http://en.wikipedia.org/wiki/SMART_criteria)

For example, let’s suppose one of our goals is to increase our revenue from $65,000 to $77,000 the following year.  Here’s how we make it S.M.A.R.T.:

• S – Specific:  Increase revenue by $12,000 to $77,000 in the calendar year 2011.
• M – Measurable:  If our annual revenue reaches $77,000 at year end, we will have been successful.
• A – Ambitious:  The goal represents your very best effort or maximum output. 
• R – Realistic:  Considering vacancy rates (in this case) a $1,000/month increase in revenue is achievable.
• T – Time Bound:  We are using the 2011 calendar year as our time constraint.

Other examples of S.M.A.R.T goals may be that your vacation home does not sit vacant more than 5 nights in any calendar month, or that your non-rental revenue in the year 2012 exceeds $5,000.

This may seem like a simple exercise but you’d be surprised how easy it is to set a goal that doesn’t line up with the S.M.A.R.T. principles.  Using this approach to set appropriate goals for your vacation rental business will help ensure your goals are driving your business towards increased profits.

Equally as important as the goals you set are the metrics you employ to track your progress. Many businesses refer to their primary metrics as Key Performance Indicators, or KPI’s.  My wife, Angela, and I established our KPI’s early on in our vacation rental business and have stuck with them ever since. 

We set our goals using the following KPI’s:

• Rental Revenue – includes regular nightly revenue and fees for additional guests
• Non-Rental Revenue – includes cleaning and pool heating fees, underwater camera and video game console rentals, and commissions from attraction ticket sales
• Booked/Occupied Nights– the total number of nights in a year our home is occupied  including:    
  • Personal Use – nights we stay in the home for our own use
  • Donations – nights we are able to give away with little or no revenue in return
  • iTravex Exchange – nights we’ve taken in trade using iTravex.com 
• Vacant Nights  – missed opportunities during the year when our home has sat empty

We have kept track of these KPI’s by month and by house for more than four years.  The historical data has proven to be invaluable to us in terms of understanding and managing our business while maximizing our ROI. 

I spend 30-45 minutes each month putting the KPI information we gather into a simple Microsoft Excel spreadsheet that allows us to monitor the progress of our business over time.  If you have not been tracking this information, I recommend taking the time to go through past bookings to compile whatever data you can to give yourself a benchmark. Then going forward you’d only need to maintain the spreadsheet moving forward.  To me, this is definitely time well spent. 

With this information readily available, you can make more informed decisions on:

• Which reservations to take when check-in and check-out dates conflict
• Which bookings to discount
• When to run special offers or featured listings
• When to take trades
• Which nights are available for donations

Donations have become an increasingly more important KPI for us in our vacation home rental business.  In our next blog we will explore several ways to grow your vacation home business, (and your heart) by donating time in your vacation home. 

The Bottom Line:  Proper goal setting and tracking of KPI’s is an integral part of maximizing the ROI of any business.  A business running without goals or established metrics to track the progress towards attaining those goals is analogous to a ship at sea without a rudder or a compass.  The time you spend setting goals and tracking your progress will help you run your business more efficiently and profitably while paying dividends in the long run.

If you have success stories related to goals you’ve set for your business please share them in a comment below.  Until then, here’s to knowing where we’re headed and how we’re going to get there! 

Cheers!

Michael

Delightful Memories = Repeat Guests + Referrals

Hey everyone, sorry I’m late!  Angela and I have been eagerly putting the final touches on the new house before our first guests arrive this week.  We are setting this home, like the others, with the primary goal of creating delightful memories for each of our guests.  

In my previous blog, I mentioned that we should be generating repeat guests and referrals.  The simple answer for getting more repeat guests and referrals is to create more memories for your guests.

As vacation home owners, we have a unique opportunity to go far beyond providing accommodations at a good value with friendly service.   

POP QUIZ:  What product do you sell? 

A.    A comfortable night’s sleep? 

B.    A base station for your guests’ vacation? 

C.    Service with a smile? 

Those all sound a lot like what motels sell to their customers.  

In our business, Angela and I sell delightful memories. 

Ultimate Comfort.  Ultimate Convenience.  Ultimate Memories.

That’s our tagline, and it’s what we do in a few short phrases.  Comfortable, convenient and  memorable.  Everything we do with our vacation home business revolves around these three concepts.  Delightful memories get talked about over and over; sharing delightful memories allows the Love to live on.

We have found that delightful memories are the ones that keep our guests coming back (as repeat customers) in addition to recommending our home and sharing their experience with others (referrals).       

A guest review we received on VRBO.com a couple weeks back made me think about the memories this new home will create.  The review says “….We had the time of our life….we would most definitely return here….Thank you for giving us our favorite family vacation!!”  

Those sound like the words of a highly satisfied customer.  Their words; ”time of their life, their favorite family vacation,” and most importantly, “we would most definitely return here” to our home. 

So how do we create memories that delight our guests into coming back while recommending our homes to all who will listen? 

If we are intentional about creating scenarios for delightful memories to unfold, we can more easily identify the opportunities to create those memories for our guests before they arrive.  The idea is to be intentional about creating scenarios for delightful memories to occur.

Here are three examples where being intentional resulted in incremental bookings for us. 

Opportunity 1:  During the booking process, a youth basketball team mentioned they needed to cook lots of rice.  We purchased two large rice cookers for $40 each and let them know several weeks prior to check-in we had done so… just for them.

Result:  The team had a great time; have stayed with us three years in a row and are booked in two houses for a week this July.  Plus, now we have rice cookers at the houses for other groups. 

Opportunity 2:  Two years ago, a couple with a 3-year-old daughter booked our house for a week.  It was her first trip to Disneyland so we purchased Tinkerbell pajamas, an autograph book and mouse ears hat that were left out on her bed.

Result:  Their daughter calls our home her “Disney House,” and they recently booked their third vacation with us for November 2011.     

Opportunity 3:  Four businessmen checked out of our home two years ago and mentioned what a great time they had playing ping-pong after long days of seminars.  When they checked in last year we left four premium ping-pong paddles and 3-star balls with a note that read “Let the games begin!”   

Result: They immediately called to thank us when they found the paddles and booked their week for 2012 the day before they checked out this year!   

The Bottom Line:  Giving your guests a reason to come back and refer your home can reduce your marketing costs, build your customer base and your annual revenue.  So far, in 2011 we have seven reservations accounting for 49 nights that are repeat guests, an incremental seven percent increase in occupancy for both houses! 

For many of us peak season is around the corner, here’s to creating delightful memories that keep them coming back for more, the kind they’ll tell all their friends about… 

Tell me about some of the things you do to create memories.

Cheers!   

You are reading this blog for one of two reasons:  You either own or operate a vacation home and are interested in learning how to get more enjoyment and profit from it, or you are one of the friends I personally invited to read this, my first blog on HomeAway®.  Either way, I’m glad you’re here.   

Hello – I am Michael and I LOVE vacation homes!  When I say I Love (yes, with a capital L) vacation homes, I am not just talking about staying in them or making money from them.  When I say I Love vacation homes, I mean I really Love vacation homes, everything about them.  In my big bald head, thoughts about vacation homes are interwoven throughout my day, each day, every day.  I can’t help it. 

It was four years ago this month that my wife Angela and I relocated to Texas and turned our family home (http://www.vrbo.com/126904) into a vacation home.  Our goal was to keep our home a few years or more, at least long enough to make some money on it.  We had just refinanced nearly $100,000 worth of equity from the home to remodel the backyard and by early 2007 the real estate boom in Orange County was starting to correct.

My professional background is in the wireless communications industry, I currently serve as a consultant of sorts to independent wireless retail store owners.  My Lovely wife Angela and I are partnered in our vacation home business together (but she does most of the work,) her prior experience is in the hospitality and pharmaceutical sales industries. 

In April, 2007 with little confidence and no idea what we were doing, we threw together a rental agreement and got the house ready for rent.  We listed it on VRBO.com and HomeAway.com for $250 a night and prayed we would book 10-12 nights per month to cover our mortgage.   Our “plan,” if you could call it that, was to cover 50 percent of our costs in the first 12 months, then hopefully be covering 100 percent of our costs from then on.   Making a profit didn’t occur to us as a true reality at that time, although we knew that if everything went well the potential was out there.  That was four years ago.

Now, I am going to share this because I still can’t believe it, and I think it’s illustrative of how awesome the vacation home business is.  As humbly as possible I want to drop your jaw a little bit with the real potential of a home based vacation home business.  This month our little vacation home business will have served our 3,800th guest and will have booked our one-millionth dollar of revenue.  Doesn’t that just sound ridiculous? 

Business is good; we just closed escrow on our third vacation home (lots of good topics coming up) and should have it ready to rent this June.  The success we’ve found stems from a mentality of constant improvement, one idea at a time.  Not all of our ideas have worked, but a lot of them have.  Those that worked are the ones I’d like to share with you throughout the year on this blog.   

If you own or operate a vacation home and are looking for ideas on the following topics, then I think you will get something from reading this blog every couple of weeks.

• Maximizing your revenue, adjusting rates and discounting (our first topic)
• Analyzing your business metrics year over year, long-term planning and goal setting
• Building a repeat customer base that generates referrals
• Giving guests an experience they will gladly pay for
• Expanding your already established vacation home business

If there is ever a specific topic or question you would like to discuss, you can reach me by posting a comment on my blog or starting a thread within the Community and letting me know. 

Cheers!
Michael